How Are Habits Formed? Tips f0r Forming Better Money Habits
by Lizzie Letsou
Habits: good, bad, intended, or unintended–we all have them. But how exactly do we form habits? Although some of the psychology that undergirds habit formation may seem intricate, it’s actually pretty simple.
Keep reading to find out more about how habits are formed as well as how Nav.it can support your journey to forming healthier money habits!
Why do habits exist?
So, you might be wondering: why do habits even exist in the first place? To answer this question, I’m actually just gonna ask you another question! What would you do if you didn’t have any habits? If you had to think about any and everything you do on a daily basis? If you had to consciously remind yourself to tie your shoes before walking out the door? Life would be pretty difficult, right?
Put simply, we develop habits to help us live our lives more easily and efficiently. Habits allow us to not think about those little chores and tasks we do on a daily, or even hourly, basis (like tying our shoelaces or brushing our teeth).
What causes a habit to form?
I’m going to be a little annoying and present you with another question in response to that: how did you learn to drive? (Or, if you don’t drive, how did you learn to ride a bike?) The old mantra “practice makes perfect” is extremely relevant here–we learn things through repetition and revision.
On a deeper psychological level, we develop habits out of necessity. Let’s take the driving example one step further and ask ourselves: why do we need to develop the habit of knowing how to drive a car?
The answer is so obvious it might go over your head–we need to develop this habit so that we can get to our destinations! In other words, the destination is what motivates us to learn how to drive, which, in turn, becomes an ingrained habit. This makes it easier for us to complete the task in the future.
What is a habit loop?
Unfortunately, the mechanism through which we develop habits can be corrupted. After all, we all have some bad habits, right? That’s the tricky thing about habit development–it doesn’t discriminate.
What’s worse is that sometimes we develop what’s known as a “habit loop.” A habit loop is basically a cycle. Let’s say you normally eat whenever you get stressed. If you continue to respond to stress by eating, then you will form a habit loop.
This means that every time you get anxious or upset, your body will naturally crave food (since it is accustomed to dealing with stress in this way). Sounds a lot like impulse spending, right?
How can I quit a bad habit?
Habit loops can make it especially difficult to quit bad habits. But, fear not! There are some tips and tricks you can use to quit a bad habit.
One of the most important tips I can give you is this: track your habits.
If you want to quit your bad habits, you have to know what your bad habits are exactly. Try making a list of some bad habits that you’ve noticed yourself falling into–such as over-spending while online shopping. You might even feel some immediate relief just from recognizing and calling out your bad habits.
Next, you’ll want to really think about how and why you will make a change to that habit (or habit loop). Why is that habit bad for you or your (financial) health? What are some tangible steps you can take to improve upon that habit?
(I’d like to note that it’s important to know the difference between a habit and an addiction. And, if you feel you are struggling with addiction, the best thing to do would be to seek professional treatment.)
How can I build better habits?
Alright, that’s enough about bad habits. Now that you know how to avoid those, you’re probably asking yourself: how can I build better habits?
The good news is that everything I said about how bad habits are formed pretty much applies to good habits too!
The important thing to remember about habits is that they require an incentive in order to form properly.
I’ll give you an example. I hate exercising. It’s not that I’m not athletic or that I don’t have the stamina to do it. I just find it boring sometimes, and it’s hard for me to find exercises that entertain and stimulate me and make me want to work out consistently.
So, I try to entertain myself when I’m working out. Sometimes I’ll play a TV show in the background while I’m working out. Or, if I’m going out for a run, I’ll make sure I have a super fun, vibey playlist. These little adjustments have really improved my overall fitness, workout routine, and made me want to exercise more frequently.
Voila! I formed a habit! Ensuring that you want to actively engage in a habit is essential to actually developing and implementing that habit into your daily life.
How long does it take to form a good habit?
Okay, I know I made habit building sound kinda easy–but, keep in mind that it can take up to months to actually form a habit.
Well, to be more specific, the duration of habit formation depends on a number of factors. It depends on what kind of habit you’re trying to form. And it also depends on your individual tendencies and characteristics.
The truth is: some people can build habits quicker than others.
And, that’s okay! Take your time! You’re trying to improve your lifestyle–so, focus on that bigger picture rather than getting caught up with trying to make quick, easy changes.
Myth: it takes 21 days to form a habit
How can Nav.it help me form better money habits?
Lucky for you, you don’t have to do this all on your own! You have Nav.it here to help and support you through your habit formation journey!
In fact, Nav.it makes it so easy to form and track your habits that you won’t have to go through a bunch of mental gymnastics to develop healthier financial practices.
Less spending, more saving.
One nifty feature that Nav.it offers is called “Auto-Saves.” The name pretty much tells you all you need to know about it–it allows you to create “auto-saves” in order to save a certain amount of money on a daily, week, or monthly basis (you can customize it in the app). So, with this feature, you really don’t even have to think about developing financial habits–Nav.it will do it for you!
Another super cool feature is the “Compare Budgets” page. Also pretty self-explanatory, but this feature allows you to see how your own personal budgets (for shopping, travel, groceries, etc) compare to your peers. This can be helpful to keep your financial habits in check and make sure you’re not overspending!
Overall, it’s super important to be cognizant of the habits you’re forming–good and bad ones alike. That way, you can make sure you’re always living your best life!